Company Name: Goldman Sachs Market Cap: 65,679.

82 Bloomberg Estimates - EPS

Company Ticker: GS US Current PX: 130.15 Current Quarter: 2.029
Date: 2009-04-14 YTD Change($): +45.76 Current Year: 8.162
Event Description: Q1 2009 Earnings Call YTD Change(%): +54.224 Bloomberg Estimates - Sales
Current Quarter: 7566.273
Current Year: 29953.364

Q1 2009 Earnings Call

Company Participants
• Dane Holmes, Head of Investor Relations
• David A. Viniar, Executive Vice President and Chief Financial Officer

MANAGEMENT DISCUSSION SECTION

Operator
Good morning. My name is Gerald, and I will be your conference facilitator today. I would like to welcome everyone
to the Goldman Sachs first quarter 2009 earnings conference call. Thank you. Mr. Holmes, you may begin your
conference.

Dane Holmes, Head of Investor Relations

Good morning. This is Dane Holmes, Director Investor Relations at Goldman Sachs. Welcome to our first quarter
earning conference call. Today's call may include forward-looking statements. These statements represent the firm's
belief regarding future events that by their nature are uncertain and outside of the firm's control. Firm's actual results
and financial condition may differ possibly materially from what is indicated in these forward-looking statements. For
discussion of some of the risks and factors that could affect the firm's future results, please see the description of risk
factors in our current annual report on form 10-K for the fiscal year ended November 2008. I would also direct you to
read the forward-looking disclaimers in our quarterly earnings release particularly as it relates to our investment
banking transaction backlog and you should also read the information on the calculation of non-GAAP financial
measures that is posted on the Investor Relations portion of our website, www.gs.com. This audiocast is copyrighted
material of the Goldman Sachs Group, Inc. and may not be duplicated or rebroadcast without our consent. Our Chief
Financial Officer, David Viniar, will review our results

David A. Viniar, Executive Vice President and Chief Financial Officer

Thank you, Dane I would like to thank all of you for listening this morning. I will give you an overview of our 2009
results and take your questions. In light of the continued, challenging macroeconomic backdrop, I'm pleased to report
solid first quarter results for Goldman Sachs. First quarter net revenues were $9.4 billion. Net earnings were $1.8
billion and earnings per diluted share were 3.39. These results generated an annualized return on common equity of
14.43%. Before reviewing our first quarter results, let's briefly discuss the month of December. The difficult market
environment that we faced during the first quarter of 2008 continued into December with downward pressure on asset
values, weak investment banking activity and lower equity volumes which more than offset continued strength in our
six franchise businesses. December net revenues were $183 million.
Net earnings were negative $780 million and earnings per diluted share were negative $2.15. December is also a
negatively impacted by $2.7 billion in fair value losses including approximately $1 billion in noninvestment grade
loans which included approximately $850 million for line Dell BIZELL, 625 million in our commercial real estate
loans, approximately 525 million related to principal investment business and 538 million for corporate portfolio.
December results included a CVA loss of more than $100 million as a result of a tightening of the firm's credit spreads.
Compensation expense for December was comprised of salaries, severance and amortization of prior year's awards as
new accrual for discretion or compensation was included. Although the market environment had its challenges during

Page 1 of 12
Company Name: Goldman Sachs Market Cap: 65,679.82 Bloomberg Estimates - EPS
Company Ticker: GS US Current PX: 130.15 Current Quarter: 2.029
Date: 2009-04-14 YTD Change($): +45.76 Current Year: 8.162
Event Description: Q1 2009 Earnings Call YTD Change(%): +54.224 Bloomberg Estimates - Sales
Current Quarter: 7566.273
Current Year: 29953.364

the first quarter, our results demonstrate the breadth, resiliency and strength of our business model and franchise. The
result for several of our businesses including mergers and acquisitions, equity underwriting, security services and
principal investing reflect extremely difficult operating conditions. However, having establish Adie verse set of global
businesses, strong performance in other franchise businesses like rates, commodities, currencies, credit trading and
asset management offset those negative pressures. Despite more than $2.5 million of fair value losses in the first
quarter, $2.2 billion in revenues and $300 million in additional expenses, we generated an annualized return on
common equity of 14.3%. Our performance in the first quarter was also a byproduct of significantly altered competitive
landscape. Many of our traditional competitors retreated from the marketplace either due to financial distress, mergers
or a shift in strategic priorities. Throughout this cyclical downturn, we have remained committed to serving our clients
as an adviser, financier, market maker, asset manager and co-investor. Our first quarter results demonstrate the benefit
of this uninterrupted focus on client service.
This was particularly evident in our multifaceted SIC business which posted quarterly revenues. The reduced levels
after Vailable risk capital created more market share opportunities and attractive margins across most of our franchise
businesses particularly in plain vanilla liquid products. In 2009, we have remained committed to actively managing risk
and strengthening our conservative financial profile. As a result, our exposure to legacy risk positions, including
leveraged loans and residential commercial real estate continued to be at low levels relative to our capital base. Our
financial profile is further enhanced by the fact that we have no direct exposure to the consumer. At the end of the first
quarter, our capital ratios remained at robust levels with a tier 1 ratio on the basil 2 of 16% and tier 1 under basil 1 of
14.7%. Our strong level of capital provided prudent capital cushion to weather current conditions while maintaining our
ability to be opportunistic. We have taken a similar approach to managing our liquidity profile. Our global core excess
pool of liquidity reached record levels during the first quarter of 2009. Averaging $164 billion during the quarter. As
you know, we're in the process of raising common equity. After the completion of the stress assessment if permitted by
our supervisors and supported by the results of the stress assessment, we would like to use the private capital we are
raising in addition to other resources to redeem all of the TARP capital. We never believed the investment of taxpayer
funds was intended to be permanent. Thus, we view it our duty to return the funds as long as we can do it without
negatively impacting our financial profile or ability to act as a central liquidity provider to the global Capital Markets.
I'll now review each of our businesses. Investment banking produced net revenues of $823 million, down 20% from the
fourth quarter.
With a broad-based slowdown in global activity, our backlog declined during the first quarter. Within investment
banking, first quarter advisory revenues were $527 million, down 8% from the fourth quarter. Goldman Sachs ranked
first in completed A&M globally as we advised on a number of important transactions that closed in the first quarter.
These include Gentech's $40 billion sell, Time Warner's $47 billion spinoff of Time Warner Cable and the acquisition
of UST. We are also adviser on a number of significant announced transactions, including Pfizer's $64 billion
acquisition of Wyeth, Schering Plow's 64 billion sell to Merck and the sell to Vattenfall.
First quarter underwriting revenues were down 36% sequentially. Equity underwriting revenues of $48 million were
down 82% from the fourth quarter reflecting very limited industrywide activity following continued instability of the
global equity markets. Debt underwriting improved 33% to 248 million, given the resurgence in investment grade
issuance during the quarter. Let me now turn to trading and principal investment wis is comprised of SIC, equities and
principal investments. Net revenues were $7.2 billion in the first quarter reflecting strength in client facilitation despite
significant asset priced declines across our principal investment businesses. SIC net revenues were a record of $6.6
billion in the first quarter representing 34% increase from the previous quarterly record of $4.9 billion in the third
quarter of 2007. Our record SIC performance was principally driven by favorable competitive dynamics, wider
margins, a shift to more plain vanilla liquid transactions and higher volatility which more than offset lower volumes.
Net revenues in our rates and commodities businesses were up substantially in the first quarter reaching record levels
due to strong customer flow in response to a macro environment characterized by coordinated monetary and fiscal
actions by central banks. Credit also posted strong revenues due to increased trading of cash and other liquid credit
products. Mortgage results improved sequentially but continued to be negatively impacted by losses within our
commercial real estate portfolio which totaled approximately $800 million. Turning to equities, net revenues for the
first quarter were $2 billion. Down 24% sequentially.

Page 2 of 12
Company Name: Goldman Sachs Market Cap: 65,679.82 Bloomberg Estimates - EPS
Company Ticker: GS US Current PX: 130.15 Current Quarter: 2.029
Date: 2009-04-14 YTD Change($): +45.76 Current Year: 8.162
Event Description: Q1 2009 Earnings Call YTD Change(%): +54.224 Bloomberg Estimates - Sales
Current Quarter: 7566.273
Current Year: 29953.364

Equities trading declined from robust fourth quarter due to lower customer volumes and less volatility across our cash
trading and derivatives businesses. Equities commissions were down 26% sequentially to $974 million reflecting a
slowdown in client trading activity particularly outside of the United States. Turning to risk, average daily value at risk
in the first quarter was $240 million, compared to $197 million for the fourth quarter. The increase was driven by
higher credit spread risk. Let me now review principal investments which produced negative net revenues of $1.4
billion in the first quarter. Our corporate principal investing portfolio generated net losses of $621 million during the
quarter due to further depreciation of global equity markets. Our real estate investing portfolio generated $640 million
in losses due to incremental valuation adjustments that incorporate deteriorating commercial real estate fundamentals
and higher cap rates. During the quarter, we extended our transfer restrictions for 80% of ICBC, demonstrating our
belief in the long-term prospects for the company and the broader Chinese market. Although ICBC stock price
increased modestly during the quarter, the extension of the transfer restrictions increased our liquidity discount and
resulted in $151 million loss. In asset management security services, we reported first quarter net revenues of $1.5
billion, down 17% from the fourth quarter. Asset management produced net revenues of $949 million, which was
comparable with the fourth quarter as assets under management remain fairly constant as $771 billion. We remain well
positioned in asset management as we continue to possess one of the most diversified product platforms in the business.
Security services produced net revenues of $503 million in the first quarter, down 30% sequentially due principally to
lower customer balances. As we mentioned in the fourth quarter, we expected AUM across the hedge fund universe to
decline in 2009 due to weaker hedge fund performance in redemptions.
The reduction of AUM within our business was in line with the broader industry experience. Now let me turn to
expenses. In the first quarter, compensation and benefits expense which include salaries, discretionary compensation,
amortization of prior year equity awards and other items such as payroll taxes, severance costs and benefits was $4.7
billion, accrued at 50% of net revenues which is consistent with historical accrual levels and lower returned
environments. First quarter noncompensation expenses excluding those related to consolidated investments were down
25% sequentially. The largest drivers of the decline were lower brokerage clearing and exchange fees and professional
fees. The increase in noncompensation expenses related to consolidated investments primarily reflect impairment
charges of approximately $300 million related to real estate assets. Headcount at the end of the first quarter was
approximately 28,000, down 7% from fiscal year end 2008. Our effective tax rate was approximately 31% for the first
quarter. While the global financial services industry continues to navigate through extremely difficult macroeconomic
conditions, our competitive position has improved significantly over recent years. We have a leading global franchise
serving the world's most important corporations, financial institutions, governments and high net worth individuals. We
provide our clients with a prod set of products on integrated basis
We have strong capital ratios, record levels of liquidity and a fair value balance sheet. And most importantly, we have a
culture of teamwork, risk management and client service that has positioned Goldman Sachs to perform well in a
variety of operating environments. Across many of our businesses, trading margins are robust and those willing and
able to commit capital are earning even higher risk premiums particularly in plain vanilla businesses. Furthermore, the
product and geographic diversity of our business provides Goldman Sachs with significant flexibility and a broad
opportunity set. Given the challenging fundamental backdrop in the global economy, we continue to be cautious about
the near term outlook for our businesses. Nevertheless, we remain focused on our core strategy as an adviser, financier,
asset manager, co-investor and market maker and believe this integrated model provides the ability to deliver strong
returns for our shareholders over the long term. With that, I'd like to thank you again for listening today and I'm now
happy to answer your questions.

Q&A
Operator
And your first question comes from the line of guy moss cause ski with Merrill Lynch.
<Q>: Good morning, David.

Page 3 of 12
Company Name: Goldman Sachs Market Cap: 65,679.82 Bloomberg Estimates - EPS
Company Ticker: GS US Current PX: 130.15 Current Quarter: 2.029
Date: 2009-04-14 YTD Change($): +45.76 Current Year: 8.162
Event Description: Q1 2009 Earnings Call YTD Change(%): +54.224 Bloomberg Estimates - Sales
Current Quarter: 7566.273
Current Year: 29953.364

<A>: Good morning, Guy

<Q>: First question is, should we interpret your comment in the release that illiquid assets generally continue to decline
in value in the first quarter to mean that very little of the SIC revenue in the quarter was the result of just reversal
negative marks in the prior four months?
<A>: Yes, that's correct. I mean, you saw that we had another $800 million of writedowns on commercial real estate
loans. You know, there were very little in reversal and virtually nothing in reversal of marks on illiquid assets. In fact,
they continued to go the other way.
<Q>: Sort of a related question. Did you a thorough press call on the AIG relationship and the payments you received
from them after the bailout of AIG. These results have some people asking me if I think that some of these revenues
reflect recoveries on marks in the prior periods relate to some of those positions.
How would you respond when you are asked that question?
<A>: First of all, virtually all of those cash flows, which as you know were just cash flows, they had nothing to do with
the P/L and in fact, most of them were value-for-value cash flows, most of those took place before the end of the year.
The main lane transactions were unwound before the end of the year. I would say our P/L related to AIG in the first
quarter rounded to zero.
<Q>: Okay, that's helpful, thanks. You mentioned the 800 million of CRE finance losses. I guess on some combination
of whole loans and CMBS, you specifically say that excludes hedges and we know that the CMBX performance was
generally pretty negative. So it would seem a good deal of the loss might have been covered by hedges depending on
how hedged you were. Can you give us a sense of your hedge coverage in CRE and what kind of offsetting gains those
hedges might have produced?
<A>: Sure, you know, the stuff that was really directly tied to hedging those positions probably about $100 million,
you know, plus or minus a little bit of positive. You know that did not include what we did in our normal CMBS
trading business so just the, you know, direct hedges rounded to about $100 million of profit.
<Q>: Okay, on the legacy position?
<A>: Yes. Right.
<Q>: Okay. Maybe we can switch to the global core excess. You took that up to 163 billion. That's over a $50 billion
increase. Can you talk a little bit about both how and why you decided to take it to that level?
<A>: Yeah. They're kind of related. It's still a dangerous environment and you know, as you know and you have heard
us say many times there is nothing more important than liquidity. In this dangerous environment, it made sense to have
a lot of liquidity from a defensive and offensive point of view, so you know to protect ourselves and also to take
advantage of opportunities to buy illiquid assets if they came about. The environment in the first quarter was such that,
you know, there were so many opportunities in truly liquid assets that there was no need to use liquidity to buy illiquid
assets and there weren't a lot of good illiquid assets for sale. So it really both from a prudence point of view, it made
sense to take it up. From an opportunity point of view, it made sense to take it up and the opportunities thoughout did
not cause to us use any of it.
<Q>: Got it. How come book value increased so little over the year-end figure?
You had in the last four months, you had net earnings of about $1.24 but the book value was only up I think about 14
cents.
<A>: This is complicated. I apologize in advance for going through something so technical. Led me do this so I can
explain it to everybody. When we award compensation, we take the expense at the award price and the tax benefit at
the award price. As equity based compensation is delivered, the firm is getting the price that is actually delivered. In
prior years, when the price was higher than where the equity had been awarded, there was an additional tax benefit to
Goldman Sachs that went to book value. It is not P/L. As long as you have prior credits, it goes to book value not to

Page 4 of 12
Company Name: Goldman Sachs Market Cap: 65,679.82 Bloomberg Estimates - EPS
Company Ticker: GS US Current PX: 130.15 Current Quarter: 2.029
Date: 2009-04-14 YTD Change($): +45.76 Current Year: 8.162
Event Description: Q1 2009 Earnings Call YTD Change(%): +54.224 Bloomberg Estimates - Sales
Current Quarter: 7566.273
Current Year: 29953.364

P/L. In this quarter, given what happened to our stock price over the course of the year, the equity that was delivered
was delivered at a lower price than where it had been awarded. To use the round numbers, we delivered roughly 30
million shares at a price that on average was roughly $100 per share lower than where it had been awarded. So that
would be $3 billion at roughly a one-third tax rate, would be roughly $1 billion or $2 per share in book value. So had it
not been for that tax effect on our books, we would have had a $2 increase value. Sorry for going through the technical
accounting, but that's the explanation.
<Q>: That was a very crisp explanation of something that takes a lot longer to talk about. I appreciate it.

Operator
Your next question comes from Howard Chen from Credit Suisse
<Q>: Good morning. Thanks for taking my questions. First, a lot of interest on the sustainability of SIC revenues. I
know it's a difficult question to answer. Could you provide any thoughts on how you you and the management team
think about that over the near and intermediate term?
<A>: You know me well enough and everyone knows me well enough to know I would never use the words
sustainability and revenues in the same sentence. You know, our revenues kind of start every day, but what I will tell
you is that the revenues in SIC were very, very broad based. You know, it's not like there was any individual position
or any individual business. They were across the variety of rates business and currencies and commodities and credit
and you know, mortgages excluding the commercial real estate loans and so it was very, very wisespread and while,
you know, we clearly had the benefit of higher spreads, less competition. We also had the detriment of lower volumes
and so the expectation would be that at some point there would be more capital in the market and so those spreads
would narrow but that would likely come at a time when there would be higher volumes so you would have offsets. As
I said, I can't tell you that we're going to have $6.6 billion every quarter, but I can tell you that if you go back in history
and excluding really big writedowns in the fourth quarter of last year, we've had R50E8ly good SIC performance in
almost any type of environment that you have seen. Whether it was high rates, low rates, strong dollar, weak dollar,
high commodity prices, low commodity prices, you know, wide credit spreads and narrow credit spreads., we tended to
have good performance across the board. While I can't give you sustainability across the board we can tell you that we
have performed because of the breadth of that business.
<Q>: That's helpful. Thanks. Maybe following up from a different angle, how do you think about resource-- allocating
resources to a fixed income trading business that just, you know, blew away its previous quarterly record by over 40%
by the way we look at it?
<A>: You know, we've talked a little bit about this in the past. We are resource allocation process is a pretty dynamic
process. We look at allocating a whole variety of resources including capital, risk limits, balance sheet and people. And
you know, it's not just based on how you've done. It's based on where you think the opportunities are going to be in the
future. So you know, we'll continue to look at it. We will feed those places where we think we will have opportunities
with all of those resources, and you know, grow those businesses where we think-- where we think it's appropriate.
<Q>: Great, thanks. David, can you touch at all on the pacing of the March quarter and the profitability as we progress
through January, February and March?
There's a lot of market commentary that March was more challenging for some and just curious to get your point of
view.
<A>: Without being too spes pick you know, I would not put a lot of weight on, you know, a one-month versus another
month. I would tell you that our revenues across the SIC businesses were pretty consistent across the quarter.
<Q>: Thanks, and cleanup on the exposures David. Could you provide us a where marks and exposure levels stood in
March versus November for the hot spots, commercial real estate, leveraged loans, residential real estate, ALT-A,
subprime.

Page 5 of 12
Company Name: Goldman Sachs Market Cap: 65,679.82 Bloomberg Estimates - EPS
Company Ticker: GS US Current PX: 130.15 Current Quarter: 2.029
Date: 2009-04-14 YTD Change($): +45.76 Current Year: 8.162
Event Description: Q1 2009 Earnings Call YTD Change(%): +54.224 Bloomberg Estimates - Sales
Current Quarter: 7566.273
Current Year: 29953.364

<A>: Let me give you a couple of those and anything I don't answer, ask he into if I haven't given what you need. The
commercial real state, we had at the end of the quarter market value of-- round numbers I'll give you, about $8.5 billion
and about $1.5 billion was CMBS security sots real loan portion was about $7 billion and our average mark across
there was something in the high 50s. The residential real estate for us, we just have a trading position at this point. We
have nonagency residential real estate
We have roughly $4 billion split equal, roughly equally between prime ALT-A and subprime, and that is really a
trading position. You know, it's going to go up or down over the course of any quarter at this point. I wouldn't call them
legacy. Our leveraged loans, from the $52 billion of legacy loans that we had at the end of the third quarter of '07 which
is when the credit crisis really hit, we're down to a market value of about $2.3 billion. So the exposure there is pretty
minimal this point and the average mark on that 2.3 billion is in the range of 50 cents.
<Q>: Great. Thanks. I think you got them all. Net leverage during the quarter, any sense there and color on how that
particularly fluctuated during the quarter?
<A>: Well, you know, the balance sheet ended at 925. The average balance sheet was somewhat higher. The gross
leverage number was, I think, 14.7. I think I got that right. Yeah, 14.6, and the adjusted leverage was 8.4. So you know,
still pretty conservative leverage numbers.
<Q>: Great. Thanks and then on security servicing, you spoke to the gross revenues being particularly lower due to
client AUM levels, could you touch on your thoughts of the profitability of that business as it's difficult to see that
through the income statement?
<A>: You know, it is still a pretty high margin business. So you know, a lot of the security services revenue does kind
of get through to the bottom line, but you know, clearly with the decline in hedge fund assets that business was slower
in the quarter. And you know, I wouldn't expect it to grow at the rapid pace it had been growing. Hedge funds
performed better in the first quarter than they certainly had. You know, it's still a very viable asset class. We still expect
over time hedge funds to be, you know, important asset class people to invest in so we still from here expect that
business to grow.
<Q>: Great. Final one for me, and I apologize if I missed this in the prepared market. Can you qualify how much Alltel
and Sanyo benefited in benefits in the quarter?
<A>: As you know, we don't disclose individual profitability or losses on individual positions but I will tell you to
remember we're a fair value firm. Alltel was pretty well marked at the end of the year last year so there was very little
Alltel in the P/L and there was some but not a huge amount of Sanyo
<Q>: Great. Thanks, David. Congrats on the quarter.
<A>: Thank you

Operator
Your next question comes from Meredith Whitney with Meredith Whitney Advisory Group. Goompg. Too early this
morning.
<A>: Sorry, Meredith
<Q>: I'm back on caffeine. I had a few questions. One is a regurgitation of a prior question. When you look at the
composition of the revenues this quarter, it looked different from the composition of revenues in the past three years.
How do you size the business, not just allocation to one business, how do you size the larger business is the first
question?
<A>: Look, and if I don't answer your question, tell me. I will try because I think I got it. Look, one of the things about
our business and one of the advantages and we've talked about this is the breadth and diversity of our revenues and we

Page 6 of 12
Company Name: Goldman Sachs Market Cap: 65,679.82 Bloomberg Estimates - EPS
Company Ticker: GS US Current PX: 130.15 Current Quarter: 2.029
Date: 2009-04-14 YTD Change($): +45.76 Current Year: 8.162
Event Description: Q1 2009 Earnings Call YTD Change(%): +54.224 Bloomberg Estimates - Sales
Current Quarter: 7566.273
Current Year: 29953.364

don't expect that all of our businesses are going to be good at the same time. You know when that happens, it's great.
You know, it happens some of the times and you know in the 2006-2007 timeframe, but it's unrealistic to think that's
going to happen in all periods of time.
What we want is a broad enough set of businesses that if some are weaker and some are stronger, and I think that's
what you saw in the first quarter. Obviously, things that we'll call recession-sensitive businesses so things like the
merger business, equity underwriting business, security services, you know, things like that, anything equity volumes,
we're operating in a more difficult environment and things that are not necessarily sensitive to, you know, volumes,
things like many of the SIC businesses which as you have seen and I talked about before, we have been able to have
good results in almost any environment because they're not directional businesses, performed extremely well. That's,
you know, that's what we expect of our broad set of businesses. And so when we look at that, we try and see, you
know, what are the right resources and we sometimes move the resources around. We size our business for our
expectations going forward. As we sit here today, we think we have our businesses sized correctly. If the the world
were to get a lot worse, then, you know, our business would be too big. If the world improved more rapidly than people
think, we have to be out increasing our resources but from what we think going forward given the mix of businesses we
think it is sized pretty well.
<Q>: Okay. To add onto that, moving away from lender to facilitator, is it-- and I'm asking the same question again. Is
it a different composition in terms of sizing of the business?
<A>: Not necessarily. I mean, the making of markets has been the key to our business for a very long time and was the
key to the business in the first quarter. I don't think it-- you know, although clearly there was a shift to much more
liquid products in the first quarter and you know, more SIC than we have seen in some of the quarters, overall, it
doesn't really change the size of the business.
<Q>: Across the board, would you say your lending commitments came down in the quarter?
<A>: There were not a lot of new lending commitments made during the quarter. I would say that.
<Q>: Okay, and then--
<A>: There were some, Meredith. You know, there were a few large transactions and you know, when our clients
wanted it, we were there for them, but it was not-- as you know, we're a corporate lender. We're not really a consumer
lender. The corporate volumes were lower and so there weren't as many requests, but there were some.
<Q>: Okay, and then lastly in terms of-- from your release, you had talked about how some of the volatility waned
throughout the quarter and I'm trying to piece that with your cautious outlook and try to remember how cautious you
were in prior quarters. Can you elaborate on the outlook?
<A>: You know me well, I'm always cautious. At the height of the markets, I'm cautious. It's kind of what I'm supposed
to do there are headwinds still with values, asset values. I think those headwinds are less for us because we don't have
that many anymore and you know they continue to decline, but there are still headwinds and that's what makes us
cautious. Our economists are, I would say, more optimistic or less pessimistic than they've been about the outlook for
the economies going into the second half of the year so that gives us, you know, some cause for optimism, but we're
still in a difficult economic environment and that's what makes us cautious.
<Q>: Thanks so much.

Operator
Your next question comes from Chris Catowski with Oppenheimer
<Q>: Good morning. I wonder if you can talk a little bit about your expectations for the timing of the repayment of the
TARP fund and what guidance you've been given on that, and would you proceed with the equity offering in advanced
having clarity on that issue, or would you hold that back?

Page 7 of 12
Company Name: Goldman Sachs Market Cap: 65,679.82 Bloomberg Estimates - EPS
Company Ticker: GS US Current PX: 130.15 Current Quarter: 2.029
Date: 2009-04-14 YTD Change($): +45.76 Current Year: 8.162
Event Description: Q1 2009 Earnings Call YTD Change(%): +54.224 Bloomberg Estimates - Sales
Current Quarter: 7566.273
Current Year: 29953.364

<A>: So the guidance we've been given is the stress test is supposed to be completed around the end of this month.
Other than that, all I can say is what I already said in my prepared remarks, which is after the completion of the stress
assessment, if permitted by our supervisors and if supported by the results of the ves assessment, we'd like to use the
capital we raised plus additional resources to redeem all of the TARP capital.
<Q>: Second question, you announced earlier in the week a fund to purchase private equity commitments from other
parties and roughly, what's your size of that commitment and overall, what should we be expecting in terms of your
investing activity in private equity, both real estate and corporate?
<A>: That was a little bit old news. That was a fund that most of which had been raised earlier this. This was the final
closing. That's one of our asset management funds which is really a client fund. It has very little of the firm's moneys.
We're managing money on behalf of our clients. I think you probably saw it's called vintage fund 55. That's the fifth
one we have done. We have done many of these in the past and it's to buy secondary interests in private equity funds.
It's not to make primary private equity investments. It's to buy secondary interest in the private equity funds and as I
said, most of those funds has been raised before. This was the last closing and they're reporting on our fund and in fact,
part of that fund has been invested.
<Q>: Any guidance you would give us on other expectations in terms of private investment activity going forward here
for the next few quarters?
<A>: I think, clearly, there's not a lot of leverage available, I would expect the private equity investing activity to be
pretty slow. There might be some opportunities that it will be certainly slower than we have seen in the last couple of
years.
<Q>: Okay, thank you.
<A>: You're welcome.

Operator
And your next question comes from the client of keen Abu Hussein with J.P. Morgan
<Q>: Good morning. I have a question regarding tier 1 capital change. Look act SEC basil 2 and fed basil 1, can you
touch on why the capital movement has happened in tier 1 capital?
<A>: Yeah, this is the first carter we have reported basil 1. On basil 2, it was up a little bit. You know, not very much.
It went from I think 15.6 to 16. It wasn't a very big movement. Basil 1 is the first quarter we actually calculated it.
Because, remember, we weren't a bank holding company so we didn't have to calculate basil 1 before. I actually can't
tell you if there's been a lot of movement there because this is the first quarter we have done it.
<Q>: On the absolute tier 1 capital number, it's low on the fed relative to SEC. Is there any change that you need to
make, adjustments?
<A>: Yeah, well, first of all, remember, it is the first quarter we've ever done it. You know, it's based on different
things so as we do that calculation more, I would expect those numbers fight get a little bit closer together, but
regardless even that 13.7% number is a very, very high absolute basil 1 capital ratio, tier 1 capital ratio so we're
extremely comfortable with where that is.
<Q>: Moving from fed basil 1 to fed basil 2, I know it's a bit early, but can you touch on would you expect any
material changes between basil 1, basil 2 in that respect?
<A>: I expect our basil 2 fed number would be close to our basil 2 number that we reported
<Q>: Okay, and lastly, on opportunities you mentioned the flexibility of moving resources. Where do you see the
opportunities if you take a slightly longer-term view and where are you shifting resources to?

Page 8 of 12
Company Name: Goldman Sachs Market Cap: 65,679.82 Bloomberg Estimates - EPS
Company Ticker: GS US Current PX: 130.15 Current Quarter: 2.029
Date: 2009-04-14 YTD Change($): +45.76 Current Year: 8.162
Event Description: Q1 2009 Earnings Call YTD Change(%): +54.224 Bloomberg Estimates - Sales
Current Quarter: 7566.273
Current Year: 29953.364

<A>: Well, let me talk about the opportunities. Look, we continue to see opportunities right now in the very, very
liquid products. So I don't think those opportunities are going away so fast. The other place we continue to look for
opportunities is, you know, we have had a long history as being a good investor in distressed assets. We think there are
a lot of distressed asset opportunities. So far, there haven't been many of those opportunities because, you know, sellers
and buyers' prices have not yet come in line. We think that is likely to happen over the next several months, and so we
think those opportunities are there, and we continue to look and think that certainly over the medium to long-term there
will be very good opportunities outside the United States and especially in some of the brick countries and the
emerging markets where maybe there's a pacing question in the near term but if you look out three to five years, we
certainly expect those economies to grow quite rapidly and there to be good opportunities for Goldman Sachs
<Q>: And do you see areas where you are taking resources out?
Can you talk about that as well?
Or would you say that net-net resources will be significantly higher over the next two, three years?
<A>: Very hard to say. All I can say is right now, I think we're sized appropriately for where the business is, and you
know, if the business begins to grow again, then I think we will need more resources and if it doesn't, then we won't.
<Q>: Great. Thank you very much.
<A>: You're welcome.

Operator
Next question comes from Jeff Hart with Sandler O'Neill
<Q>: Good morning. Nice number.
<A>: Thank you.
<Q>: This has been touched on a couple times, but I keep looking at an excess liquidity pool of 164 billion which is
18% of assets. That seems like an awful lot of kind of capital to be parking and the reverse repo book and how much
long do you hold to that much cash in the hopes that opportunities come up and how long are you hoping holding what
should be a low-earning asset?
<A>: It is definitely a low-earning asset and it is definitely a drag on our asset and return on equity and I think in this
environment, prudence is the better path, and so, you know, if the environment starts to get better, then we would need
to hold less-- somewhat less liquidity, but we also might see opportunities to use it so you know, either we would use it
or we would not hold as much if the environments are to get better, but in this environment, I think we would make the
tradeoff of slightly lower earnings in ROE for the prudence of having the higher liquidity.
<Q>: Okay and looking at the FIC number which was big, can you give us any kind of idea of how big some of gains
or revenues might be from the positions that are not included in buyer, some things like principal strategies and I guess
would be equities but the special situations group, things like that versus kind of your pure trading businesses?
<A>: As you know, we don't disclose individual business profitability, I would tell you, as we said, virtually all of the
revenue was from very liquid, from trading, very liquid products. Very little in anything that was illiquid.
<Q>: Okay, and finally, with very strong fixed income trading quarter, I was surprised to see brokerage and clearing
activity be down expenses as much as they are?
Is that because of the equities business?
Why do we have a low BCE number given how low activity was?

Page 9 of 12
Company Name: Goldman Sachs Market Cap: 65,679.82 Bloomberg Estimates - EPS
Company Ticker: GS US Current PX: 130.15 Current Quarter: 2.029
Date: 2009-04-14 YTD Change($): +45.76 Current Year: 8.162
Event Description: Q1 2009 Earnings Call YTD Change(%): +54.224 Bloomberg Estimates - Sales
Current Quarter: 7566.273
Current Year: 29953.364

<A>: What drives that more than anything are equity volumes and equity volumes were really off across the board but
especially outside of the United States. That's the main driver of BCE would be equity volumes
<Q>: Okay, and I suppose finally, investment banking pipe lines are down, not a big surprise given the environment.
Are you getting any kind of a sense from conversations with clients-- I mean, how bad is CEO confidence?
What do you think it takes to actually start seeing people want to start transacting again in kind of M&A and equity
markets?
<A>: Let's separate them. I think over the last several weeks, you already started to see a pretty big pickup in Capital
Markets activity. I can't tell you it will be sustained. Last week, I think-- I may have this a little wrong, but I think the
number was 24 equity offerings last week which is the largest number we have seen in a very, very long time and this
week while they're very small, there are two IPOs being done this week. I think it's the first time since the summer that
we have seen two IPOs in the same week. So the capital market and even in the first quarter, we started to see a big
pickup in investment grade offering. I think the Capital Markets activity is really starting to pick up and if the equity
markets hold given the need many companies have for equity, I think you will see a pretty big pickup in Capital
Markets activity. I think the merger business will take more time. You will need to see more sustained pickup in Equity
in economic activity which will drive CEO confidence and drive the merger business. You have seen the occasional
very large deal and it's the occasional very large deal as opposed to constant flow of billion dollar merger deals. I think
there is a lot of dialogue but it's going to be a little while longer until the triggers get pulled on some of those deals but I
think capital market activity can come back faster.
<Q>: Thank you.

Operator
Your next question comes from Lauren Smith with KBW
<Q>: Hi. Good morning. Just a quick question or clarification, actually. In your commentary about SIC, you said there
was very little write-up or reversal of prior marks on assets, I just also want to clarify that there's nothing in the SIC
number either that relates to your own CDS?
<A>: We had a loss of about $200 million on our own-- on CVA, on our own debt because our credit spreads tighten
add cross the quarter.
<Q>: Okay, 200 million. Great. Thanks.
<A>: That was a loss.
<Q>: Loss, okay. Thanks.
<A>: You're welcome.

Operator
Your next question comes from Steve with SVR.
<Q>: Good morning, David.
<A>: Good morning, Steve.
<Q>: Just real quick on interest expense, is this down by about half, quarter over quarter?
Was there any hedging gains involved in that number, or is that a result of fed funds at effectively zero right now?

Page 10 of 12
Company Name: Goldman Sachs Market Cap: 65,679.82 Bloomberg Estimates - EPS
Company Ticker: GS US Current PX: 130.15 Current Quarter: 2.029
Date: 2009-04-14 YTD Change($): +45.76 Current Year: 8.162
Event Description: Q1 2009 Earnings Call YTD Change(%): +54.224 Bloomberg Estimates - Sales
Current Quarter: 7566.273
Current Year: 29953.364

<A>: I think, you know, it was more the absolute rates were down. You know, it's not a number that we focus on that
much because and we do it for our P/L purposes and it's within our businesses because our assets turn over so quickly.
When rates turn over what we earn on the asset sense is equally low. It was really just a function of the very, very low
absolute rates
<Q>: Got it. That's a relatively sustainable number until rates go back higher?
<A>: Yes.
<Q>: Okay, and then just real quickly, on the VAR, it sounds as if the principal trading business, you know, less
emphasis, agency businesses is probably a little bit higher this quarter. Maybe that characterization is wrong, correct
me if I'm wrong F that is the case, you know, why would VAR be higher?
Can you help us conceptualize that a little bit?
<A>: It's really just volatility and movements in credit spreads. It's not position size.
<Q>: Got it. Okay. Thank you.
<A>: You're welcome.

Operator
And your final question is a follow-up from the line of guy Moszkowski with Merrill Lynch.
<Q>: David, I just wanted to ask you going back to the the concept of the TARP repayment. Obviously it's
understandable why you would want to do that, but what's the interaction of no longer being a TARP preferred
recipient versus eligibility to participate in the FDIC's TLIP program?
Are they related?
Really, does it matter to you at this point?
<A>: As far as we know, they're not tied together. There are participants in the FDIC guarantee program who do not
have TARP capital today and we think that Congress has made it pretty clear that they're interested really in the equity
investments in the firms that have received TARP capital and those things are not tide together. That's everything we
know. As far as whether it's important, I mean, you know we've begun to issue unguaranteed debt. We'd like to
continue to do that when opportunities are available for us.
You know, we think that our spreads will come in and we will continue to do. In the meantime we have some capacity
at the FDIC under pretty attractive spreads and we will continue to do when it's available, but we expect to continue to
raise unguaranteed debt when it's available as well.
<Q>: Great. Thanks very much for taking the follow-up question.
<A>: You're welcome, Guy.

Operator
I would like to turn the conference back to Mr. Holmes for any closing remarks
<A>: thanks, everyone, for joining the call. If anyone has questions, feel free to reach out to me and I will be happy to
answer it. Otherwise, have a nice day.

Operator

Page 11 of 12
Company Name: Goldman Sachs Market Cap: 65,679.82 Bloomberg Estimates - EPS
Company Ticker: GS US Current PX: 130.15 Current Quarter: 2.029
Date: 2009-04-14 YTD Change($): +45.76 Current Year: 8.162
Event Description: Q1 2009 Earnings Call YTD Change(%): +54.224 Bloomberg Estimates - Sales
Current Quarter: 7566.273
Current Year: 29953.364

Ladies and gentlemen, this does conclude today's Goldman Sachs first quarter '09 financial results. You may now all
disconnect.

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